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June 18, 2018
Many of us have heard the term "cryptocurrency," but few of us really understand what it means. Let's explore what some people have dubbed "the money of the future."
Back in the 90's during the tech onslaught, there were a few attempts to create a new market for a new currency: digital currency. Names like DigiCash, Beenz and DigiCash might ring a bell. Unfortunately, they did not work out.
The breakthrough came in 2009, the year Bitcoin came on the scene. There is some speculation as to who founded Bitcoin, however one alias that is synonymous with Bitcoin's founding is Satoshi Nakamoto. According to WikiPedia, Nakamoto was the name used by the individual who was known to author a whitepaper on Bitcoin. Wiki goes as far as to mention an age and date of birth of Nakamoto, stating he was born April 5, 1975 in Japan. It is further reported that the cryptocurrencies actually came about as a side product from something else. To further this, Nakamoto did not even mean to invent a decentralized currency or digital cash system. At the time no one thought this could be possible, however Satoshi proved this to be wrong.
Although the general population may not be too interested in or have much knowledge about cryptocurrency technology, this is something that banks and governments have certainly started to tune into. In fact, there is a quote from US Senator Thomas Carper in a Reuters article dated November 18, 2013, saying "Virtual currencies, perhaps most notably Bitcoin, have captured the imagination of some, struck fear among others, and confused the heck out of the rest of us." Given this article was nearly 5 years old, you can believe that much more attention has been given to Bitcoin in the years since.
The cryptocurrency systems are typically built on a peer-to-peer network that realizes accounts, balances and transactions. If a peer-to-peer type network is ringing a bell, this was the same foundation that was used by Napster when it first started operating 19 years ago on June 1, 1999. It was shut down shortly after and re-released September 3, 2002.
The big difference between regular currency and a cryptocurrency-type system is that cryptocurrency does not have a centralized environment. It is completely decentralized, making it very difficult to tamper with. There is no centralized server running the cryptocurrency system, meaning that every part of the network needs to do its part to uphold the system's integrity. When the integrity is upheld, this can prevent double spending. Every peer in the network requires a list with all transactions to ensure future dated transactions are valid and not potentially fraudulent (like double spending). If a peer within the network does not agree with a particular balance, then the transaction is broken. There must be a 100% consensus throughout the entire peer network for a successful transaction.
If you remove all the technical jargon surrounding cryptocurrency, at a basic level it is really just a collection of simplistic entries in a database that cannot be tampered with without meeting certain security criteria. This is really no different than regular currency, since that consist of verified entries in a database of accounts, balances and transactions.
Like anything new to market, there are always growing pains and marketplace resistance. This has been true for cryptocurrency, which is harder to understand than regular banking systems. Being decentralized, building confidence in cryptocurrency has been a challenge.
Fast forward to 2018 and acceptance of Bitcoin is now a reality. Particularly when you see it accepted by companies such as NewEgg, Overstock and Virgin Galactic. Business Insider provides an in depth list of businesses that accept Bitcoin.
Although digital currency is more accepted by US businesses, like those just mentioned, there are still some governments that ban digital currencies, including Bangladesh, Ecuador and Vietnam. According to Cointelepgraph, China and Russia are on the horizon of banning them. Some concerns surrounding digital currencies include being used for illegal goods and services, money laundering and tax evasion.
In a separate article at cointelegraph, it is mentioned that "every single fiat currency in the world is created, released and controlled by a single entity - in most cases a central bank. By law, ordinary citizens are only allowed to buy, sell or keep the currency. If someone tries to create any amount of money, they will inevitably find themselves behind bars."
So where does this leave Bitcoin? After all, it is not a centralized currency from a particular country and it is not controlled by a country. From what we have read, the legality of Bitcoin would depend who you are and where you are located in the world and, of course, what your intentions with it are.
Part of the base of cryptocurrency are the miners. They are a key composition of the cryptocurrency network that essentially provide a 'bookkeeping-like service' for their communities by providing CPU power (much of it now from video cards) to solve the cryptographic puzzles necessary to confirm a transaction and make a record in a distributed public ledger that is known as the block chain. As the popularity of a cryptocurrency increases, so does the complexity of the puzzle, which just continues to get tougher and tougher. This phenomenon is attractive to certain individuals because when a miner does solve a puzzle they can be rewarded quite handsomely financially via a transaction fee.
24-7 Press Release has become more aware of press releases in the cryptocurrency and blockchain industry because of the recent uptick in press releases submitted. In fact, in 2018 alone there have been dozens of stories submitted. 24-7 Press Release Newswire has also created specific industry categories to accommodate the high demand. The demand is not just on the press release submission front since an increasing number of journalists and researchers are looking for information on cryptocurrency and blockchain as well. A few recent cryptocurrency and blockchain headlines that may be found here include:
If you are in the finance industry or tech industry, the workings behind blockchain technology and cryptocurrency are something you should be paying attention to. This type of decentralized block technology will become the new wave of the future for many industries. It is just a matter of time.